21-08-2013, 11:28 AM
the funny thing is that they shunned debt for a long time, then in the last 2 years they sorta woken up and say "hey debt is f***ing cheap, lets levered up" or "we have to sell these assets to first reit" so they start levering up.
if you look at cost of equity versus debt, there is a justifiction for them to do that. and then now u see perhaps they should just remain conservative.
had they not do that yield may not have shot up.
you may argue that first reit at 75-80 cents is lower in gearing and in a good position. perhaps they were slightly under valued. at this point where does that leave us?
more risks on the table to evaluate and perhaps 75-80 cents is really the safe range now. NAV around 94 cents which means not much consider the possible revaluation downwards
if you look at cost of equity versus debt, there is a justifiction for them to do that. and then now u see perhaps they should just remain conservative.
had they not do that yield may not have shot up.
you may argue that first reit at 75-80 cents is lower in gearing and in a good position. perhaps they were slightly under valued. at this point where does that leave us?
more risks on the table to evaluate and perhaps 75-80 cents is really the safe range now. NAV around 94 cents which means not much consider the possible revaluation downwards
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